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October 26, 1990 - Image 57

Resource type:
Text
Publication:
The Detroit Jewish News, 1990-10-26

Disclaimer: Computer generated plain text may have errors. Read more about this.

BUSINESS

Ann Arbor's
Herb Amster
turned a
failing
computer
company into
a leading
manufacturer
of backup
systems.

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the MYSTIC phoenix

MELANIE KOFF

Special to The Jewish News

erb Amster's
success story
is reminiscent
of the mythic
phoenix. Ac-
cording to legend, a beautiful,
lone bird, lived in the Ara-
bian desert for nearly 600
years. This bird, — the
phoenix — consumed itself by
fire, only to rise renewed from
the ashes to start another
long life.
The one glitch is that Mr.
Amster's first business ven-
ture did not last for 600 years.
Mr. Amster was chief finan-
cial officer of Ann Arbor-
based Irwin International,
which shut down in 1983
after five years of attempts to
develop hard disk drives.
Instead of closing the door
and walking away, Mr.
Amster created Irwin
Magnetics the same year,
hoping to take the Ann .Arbor
company in a new direction.
Today, Irwin Magnetics is the
=leading manufacturer of
minicartridge tape backup

systems, producing more than
any company in the world.
Irwin Magnetics began
shipping backup devices in
1984 and today produces
more than 3,000 tape drives
a year. Mr. Amster said the
company produced its
millionth tape drive this
summer.
Last month, Mr. Amster, 55,
relinquished his role as chair-
man of the $100-million-per-
year Irwin Magnetic Systems,
mile. and its new. parent, Ar-
chive Corp. Mr. Amster's deci-
sion to step down is partly
due to a changing of the
guard.
Cipher Data Products Inc.
purchased Irwin Magnetics
for $77 million last year. In
March, Archive Corp. ac-
quired Cipher Data Products
for almost $125 million in an
unfriendly takeover.
Both Cipher and Archive
are based in California, which
makes it difficult for Mr.
Amster to remain active in
the everyday operations of the
company. "My role changed.
I -much prefer an operating
role rather than a staff role,"
. Mr. Amster, said.

Irwin's removable tape
drive systems operate in the
same manner as tape players.
Information that is resident
on the computer hard disk
can be copied onto the 3% inch
Irwin tape drive cartridge.
The information on the car-
tridge tape can then be
transferred to the computer's
hard disk. Since the tape is
removable, it provides an in-
valuable safeguard against
any accidental loss of
information.
"We were convinced from
day one that no one should
have a hard disk drive in a

Last month, Mr.
Amster .
relinquished his
role as chairman.

microcomputer without back-
ing it up," Mr. Amster said.
Irwin Magnetics grew from
this premise: computer
owners should have a simple,
dependable backup method of
protecting the information
stored on hard disks.
A handful of Irwin Interna-

tional employees worked with
Mr. Amster to nurture this
venture. Other companies
were producing tape backup
systems for hard drives used
in minicomputers. These com-
panies concentrated ovii, pro-
ducing hard drives that
stored 60 megabytes of data
or more. Also, the backup
devices on the market used
bulky 5 1/4 inch tape cartridges
that were difficult to fit in a
microcomputer.
Irwin Magnetics worked
with 3M, a producer of
Magnetic tapes, to develop a
system that was much
smaller in size than the 5 1/4
inch devices on the market.
In 1984, Irwin produced a
tape that held 10 megabytes
of information. Their $300
price was a fraction of the cost
of what other backup tapes on
the market sold for, making
Irwin's system more accessi-
ble to personal computer
owners. Irwin brought out
tape backup devices in 1985,
which held up to 20 mega-
bytes of data.
"We were ahead of our corn-
petition. We prepared for the
future:' Mr. Amster said.

A few months after their
product was on the market,
Compaq, a producer of IBM
compatible personal com-
puters, began offering Irwin's
backup tape drive as an op-
tion in its high-end models.
The following year, Irwin
built a similar relationship
with computer producers
NCR and Data General. To-
day, Irwin's backup systems
are sold to numerous other
manufacturers (including
IBM), • computer retail stores
and throughout Europe and
Japan. •
The climb to the top of the
computer backup systems
heap was not assured, but
rather pushed along by its
chairman, according to Irwin
Magnetics President Edwin
Carlson.
"Herb makes•it sound easy.
A major contribution to the
success we had back in the
early days was Herb's steady
optimism and leadership that
saw us through some of the
lean spots," Mr. Carlson said.
Irwin Magnentics employs
500 people in its Ann Arbor
headquarters. A percentage
of the backup tape drives are

THE.DETROITJEWISH NEWS 57

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